WASHINGTON — High list prices charged by hospitals are drawing increased attention, but a
federal law meant to limit what the most financially vulnerable patients can be billed doesn’t seem
to be making much difference.

A provision in President Barack Obama’s health-care overhaul says most hospitals must charge
uninsured patients no more than what people with health insurance are billed.

The goal is to protect patients from medical bankruptcy, a problem that will not go away next
year when Obama’s law expands coverage for millions.

Because the Affordable Care Act doesn’t cover everyone, many people will remain uninsured. Also,
some who could sign up are expected to procrastinate even though the law requires virtually
everyone to have health insurance.

Consumer groups that lobbied for a “fair pricing” provision are disappointed. A university
researcher who has studied the issue says the government doesn’t seem to be doing much enforcement,
and at least one state, Colorado, has enacted a stricter rule since the federal statute was
passed.

Critics say the U.S. law has several problems:

• It applies only to nonprofit institutions, which means about 40 percent of all community
hospitals are exempted. By comparison, the Colorado law also covers for-profit hospitals.

• It lacks a clear formula for hospitals to determine which uninsured patients qualify for
financial aid, and how deep a discount is reasonable. A California law spells out such a formula
for that state’s hospitals.

• More than three years after Obama signed his law, the Internal Revenue Service has not issued
final rules explaining how hospitals should comply with the federal billing limits. Delay doesn’t
signal a high priority.

“We still hear the same stories about patients who are being sent to (debt) collection,” said
Jessica Curtis, director of the hospital accountability project at Community Catalyst, a
Boston-based advocacy group that led the push for billing limitations. “It’s the same behavior that
we were seeing before the passage of the Affordable Care Act.”

The Obama administration responds that fair pricing is the law of the land, and that hospitals
are expected to comply even if the IRS has not finalized the rules. The agency has begun compliance
reviews, a spokeswoman said.

The American Hospital Association says it urges members to limit charges to the uninsured in
line with the federal law. But neither the administration nor the industry has statistics on how
many hospitals are doing so.

Most patients never face those list prices because private insurers negotiate lower rates and
government programs such as Medicare get to set what they will pay. The burden of paying list price
falls on the uninsured and people with skimpy policies. It’s unclear that the federal requirements
are helping at all.

Justin Farman, a nursing student from Watertown, in upstate New York, learned he had blood
cancer last fall, when he was uninsured.

Treatment at Upstate University Hospital in Syracuse was successful, but Farman faced more than
$54,000 in medical bills.

“After I went into remission, the bills started to roll in,” he said. The hospital did not tell
him that financial assistance might be available, Farman said.

A spokesman for Upstate said the federal fair-pricing law does not appear to apply to the
hospital because it is publicly owned and not incorporated as a nonprofit under federal law.

Part way through his treatment, Farman was able to get on Medicaid. With the help of a community
agency, he also applied for assistance under New York law to help pay for his medical care during
the period he was uninsured. On Friday, he received a letter saying his application had been
approved and his debts would be greatly reduced.

Such discounts should be taken upfront, advocates say.

Congress needs to take a second look at the federal law, said University of Southern California
health-policy professor Glenn Melnick.

As written, the law leaves it up to hospitals to determine which uninsured people qualify for
discounted bills, and that could create a whole new set of disparities.

“This issue will not go away,” Melnick said. “Even when the (Affordable Care Act) is fully
implemented, there will be millions and millions of people without insurance.”